The following discussion and analysis should be read in conjunction with our Financial Statements appearing in this report and our audited consolidated financial statements and related notes included in our 2021 Annual Report on Form 10-K. Background Certain Terms - Glossary
The following represent terms and statistics specific to our company and industry. They are used by management to evaluate and measure operations, results, productivity and efficiency.
ACMI Service offering, whereby we provide outsourced cargo and
passenger aircraft operating solutions, including the provision
of an aircraft, crew, maintenance and insurance, while customers
assume fuel, demand and price risk. In addition, customers are
generally responsible for landing, navigation and most other
operational fees and costs.
Block Hour The time interval between when an aircraft departs the terminal
until it arrives at the destination terminal.
C Check "Heavy" airframe maintenance checks, which are more intensive in
scope than Line Maintenance and are generally performed between
18 and 24 months depending on aircraft type.
Charter Service offering, whereby we provide cargo and passenger aircraft
charter services to customers. The customer generally pays a
fixed charter fee that includes fuel, insurance, landing fees,
navigation fees and most other operational fees and costs.
CMI Service offering, whereby we provide outsourced cargo and
passenger aircraft operating solutions, generally including the
provision of crew, Line Maintenance and insurance, but not the
aircraft. Customers assume fuel, demand and price risk, and are
responsible for providing the aircraft (which they may lease from
us) and generally responsible for Heavy and Non-Heavy
Maintenance, landing, navigation and most other operational fees
and costs.
D Check "Heavy" airframe maintenance checks, which are the most extensive
in scope and are generally performed every six or eight years
depending on aircraft type.
Dry Leasing Service offering, whereby we provide cargo and passenger aircraft
and engine leasing solutions for compensation that is typically
based on a fixed monthly amount. The customer operates, and is
generally responsible for insuring and maintaining, the flight
equipment.
Heavy Maintenance Scheduled maintenance activities that are extensive in scope and
are primarily based on time or usage intervals, which include,
but are not limited to, C Checks, D Checks and engine overhauls.
In addition, unscheduled engine repairs involving the removal of
the engine from the aircraft are considered to be Heavy
Maintenance.
Line Maintenance Maintenance events occurring during normal day-to-day operations.
Non-heavy Discrete maintenance activities for the overhaul and repair of
Maintenance specific aircraft components, including landing gear, auxiliary
power units and engine thrust reversers.
Utilization The average number of Block Hours operated per day per aircraft.
Yield The average amount a customer pays to fly one tonne of cargo one
mile.
Business Overview
We are a leading global provider of outsourced aircraft and aviation operating
services. We operate the world's largest fleet of 747 freighters and provide
customers a broad array of 747, 777, 767 and 737 aircraft for domestic, regional
and international cargo and passenger operations. We provide unique value to our
customers by giving them access to highly reliable modern production freighters
that deliver the lowest unit cost in the marketplace combined with outsourced
aircraft operating services that we believe lead the industry in terms of
quality and global scale. Our customers include express delivery providers,
e-commerce retailers, the U.S.
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military, charter brokers, freight forwarders, direct shippers, airlines,
manufacturers, sports teams and fans, and private charter customers. We provide
global services with operations in Africa , Asia , Australia , Europe , the Middle
East , North America and South America .
We seek to achieve our growth plans and increase shareholder value by:
•
Provide a superior quality of service to our valued customers;
•
Focus on securing long-term customer contracts;
•
Manage our fleet with a focus on state-of-the-art aircraft;
•
Leverage our flexible business model to maximize utilization;
•
Stimulate significant and continuous improvements in productivity;
•
Pursue and selectively evaluate future acquisitions and alliances; while
•
Appropriately manage capital allocation and create shareholder value.
See “Business Overview” and “Business Strategy” in our 2021 Annual Report on Form 10-K for more information.
Business developments
Our Airline Operations results for the first quarter of 2022, compared with 2021, were positively impacted by higher commercial charter cargo Yields, net of fuel, including the impact of expanding and enhancing our relationships with strategic customers through new and extended long-term contracts. These higher Yields were driven by strong customer demand that was further enhanced by the continued reduction of available cargo capacity in the market provided by passenger airlines and the disruption of global supply chains due to the COVID-19 pandemic.Block Hours flown during the quarter decreased as we reduced less profitable smaller gauge CMI service flying and experienced operational disruptions due to the COVID-19 pandemic. We are closely monitoring the COVID-19 pandemic and taking numerous precautions to ensure the safety of our operations around the world and mitigate the impact of any disruptions, including continuously adjusting routes to limit exposure to regions significantly impacted. We manage our fleet to profitably serve our customers with modern, efficient aircraft and have entered into the following transactions to secure capacity to meet strong customer demand.
•
InJanuary 2021 , we signed an agreement with Boeing for the purchase of four new 747-8F aircraft. The first of these aircraft is expected to be delivered during the second quarter of 2022 and the remaining three throughout 2022. All four of these aircraft have been placed with customers under long-term agreements.
•
Between May andOctober 2021 , we acquired six of our existing 747-400 freighter aircraft that were previously on lease to us. In May and June of 2021, we reached agreement with several of our lessors to purchase five of our other 747-400 freighters at the end of their existing lease terms, one of which was acquired inMarch 2022 . The acquisition of the remaining four aircraft will be completed between May andDecember 2022 .
•
InDecember 2021 , we signed an agreement with Boeing for the purchase of four new 777-200LRF aircraft. The first of these aircraft is expected to be delivered late in the fourth quarter of 2022 and the remaining three throughout 2023. We continually assess our aircraft requirements and will make adjustments to our capacity as necessary. Some of these actions may involve grounding or disposing of aircraft or engines, which could result in asset impairments or other charges in future periods. InMarch 2022 , we signed a new five-year CBA with our pilots, effective as ofSeptember 2021 . Under this industry competitive agreement, all of our pilots are receiving significantly higher pay, quality of life improvements and enhanced benefits. Labor costs arising from the new CBA are materially greater than the costs under our previous CBAs with our pilots (see Note 11 to our Financial Statements for further discussion). Given the dynamic nature of the COVID-19 pandemic, the financial impact cannot be reasonably estimated at this time. We have incurred and expect to incur significant additional costs, including higher premium pay for pilots operating in certain areas significantly impacted by the COVID-19 pandemic and other operational costs, including costs for continuing to provide a safe working environment for our employees. In addition,COVID-19-related airport closures, employees who are unable to work, vaccine mandates, disruption of operations by our third-party service providers, availability of hotels and restaurants, ground handling delays or reductions in passenger flights by other airlines globally, have impacted and could further impact our ability to position employees to operate and fully utilize all of our aircraft. The continuation or worsening of the aforementioned and other factors could materially affect our results for the duration of the COVID-19 pandemic. 19 --------------------------------------------------------------------------------
Operating results
The following discussion should be read in conjunction with our financial statements and other financial information appearing and referred to elsewhere in this report.
Three months completed
Operating statistics
The following tables compare our operating segment fleet (average aircraft equivalents during the period) for the three months ended
Segment Operating Fleet 2022 2021 Inc/(Dec) Airline Operations* 747-8F Cargo 10.0 10.0 - 747-400 Cargo 34.5 33.6 0.9 747-400 Dreamlifter 0.3 1.2 (0.9 ) 747-400 Passenger 4.9 4.9 - 777-200 Cargo 9.0 9.0 - 767-300 Cargo 24.0 24.0 - 767-300 Passenger 5.3 5.0 0.3 767-200 Cargo - 5.6 (5.6 ) 767-200 Passenger - 0.6 (0.6 ) 737-800 Cargo 8.0 8.0 - Total 96.0 101.9 (5.9 ) Dry Leasing 777-200 Cargo 7.0 7.0 - 767-300 Cargo 21.0 21.0 - 737-300 Cargo - 1.0 (1.0 ) Total 28.0 29.0 (1.0 )
Less: Aircraft leased without hull to CMI customers (21.0 ) (21.0 )
–
Total operating average in aircraft equivalents 103.0 109.9
(6.9 )
* Airline Operations average fleet excludes spare aircraft provided by CMI customers. Block Hours 2022 2021 Inc/(Dec) % Change Total Block Hours** 82,626 88,523 (5,897 ) (6.7 )%
** Includes air and other operations
The following table compares our Operating Revenue for the three months endedMarch 31 (in thousands): 2022 2021 Inc/(Dec) % Change Operating Revenue Airline Operations$ 995,355 $ 826,240 $ 169,115 20.5 % Dry Leasing 46,170 40,364 5,806 14.4 %
Amortization of customer incentive assets (10,051 ) (10,481 )
(430 ) (4.1 )% Other 5,682 5,177 505 9.8 % Total Operating Revenue$ 1,037,156 $ 861,300 20
--------------------------------------------------------------------------------
Airline Operations
2022 2021 Inc/(Dec) % Change
Block Hours
Cargo 78,425 83,110 (4,685 ) (5.6 )%
Passenger 3,306 3,648 (342 ) (9.4 )%
Total Airline Operations 81,731 86,758 (5,027 ) (5.8 )%
Revenue Per Block Hour
Airline Operations $ 12,178 $ 9,524 $ 2,654 27.9 %
Cargo $ 11,891 $ 9,127 $ 2,764 30.3 %
Passenger $ 18,991 $ 18,563 $ 428 2.3 %
Airline Operations revenue increased $169.1 million , or 20.5%, primarily due to
an increase in Revenue per Block Hour, partially offset by a reduction in Block
Hours . Revenue per Block Hour rose primarily due to higher Yields, net of fuel,
including the impact of new and extended long-term contracts, as well as higher
fuel prices. Block Hours flown decreased as we reduced less profitable smaller
gauge CMI service flying and experienced operational disruptions due to the
COVID-19 pandemic.
Functionnary costs
The following table compares our Operating Expenses for the three months endedMarch 31 (in thousands): 2022 2021 Inc/(Dec) % Change Operating Expenses Salaries, wages and benefits$ 298,019 $ 202,614 $ 95,405 47.1 % Aircraft fuel 244,337 163,551 80,786 49.4 %
Maintenance, materials and repairs 118,899 121,133 (2,234) (1.8)% Depreciation
72,202 67,789 4,413 6.5 % Travel 42,768 37,672 5,096 13.5 % Navigation fees, landing fees and (12.3 )% other rent 39,354 44,887 (5,533 ) Passenger and ground handling (12.8 )% services 34,936 40,065 (5,129 ) Aircraft rent 12,995 20,756 (7,761 ) (37.4 )% Loss (gain) on disposal of flight NM equipment (6,240 ) 16 6,256 Special charge 2,633 - 2,633 NM Transaction-related expenses - 201 (201 ) NM Other 55,857 58,412 (2,555 ) (4.4 )% Total Operating Expenses$ 915,760 $ 757,096
NM represents year-to-year changes that are not significant.
Salaries, wages and benefits increased$95.4 million , or 47.1%, primarily due to increased pilot costs related to our new CBA and higher premium pay for pilots operating in certain areas significantly impacted by the COVID-19 pandemic. Aircraft fuel increased$80.8 million , or 49.4%, primarily due to an increase in the average fuel cost per gallon and lower consumption related to decreased Charter flying. Our exposure to fluctuations in fuel price is generally limited to the shorter-term commercial portion of our Charter services, as fuel risk is largely mitigated by price adjustments, including those based on indexed fuel prices for longer-term commercial charter contracts. We do not incur fuel expense in providing ACMI and CMI services or in ourDry Leasing business as the cost of fuel is borne by the customer. Similarly, we generally have no fuel price risk for AMC charters because the price is set under our contract with the AMC, and we receive or make payments to adjust for price increases and decreases from the contractual rate. Average fuel cost per gallon and fuel consumption for the three months endedMarch 31 were: 2022 2021 Inc/(Dec) % Change Average fuel cost per gallon$ 2.74 $ 1.71 $ 1.03 60.2 % Fuel gallons consumed (000s) 89,199 95,586 (6,387 ) (6.7 )% 21
-------------------------------------------------------------------------------- Maintenance, materials and repairs decreased$2.2 million , or 1.8%, primarily reflecting$10.9 million of reduced Line Maintenance, partially offset by$8.8 million of increased Heavy Maintenance expense. Line Maintenance decreased primarily due to the reduction in flying. Heavy Maintenance expense on 747-400 aircraft increased$10.7 million primarily due to increases in the number of engine overhauls and D Checks, partially offset by a decrease in the number of C Checks. Heavy Maintenance expense on 747-8F aircraft decreased$3.1 million primarily due to a decrease in the number of D Checks, partially offset by an increase in the number of C Checks. Heavy airframe maintenance checks and engine overhauls impacting Maintenance, materials and repairs for the three months endedMarch 31 were: Heavy Maintenance Events 2022 2021 Inc/(Dec) 747-8F C Checks 2 - 2 747-400 C Checks 4 5 (1 ) 777-200 C Checks 1 - 1 767 C Checks 2 2 - 747-8F D Checks - 2 (2 ) 747-400 D Checks 2 1 1 CF6-80 engine overhauls 3 1 2 PW4000 engine overhauls - 1 (1 )
Depreciation increased
Travel has increased
Navigation fees, landing fees and other rents decreased
Passenger and ground handling services decreased
Aircraft rent decreased$7.8 million , or 37.4%, primarily due the acquisition of 747-400 freighter aircraft throughout 2021 that were previously on lease to us and changes in 747-400 freighter aircraft leases in 2021. Gain on disposal of flight equipment in 2022 represented a gain from the sale of six spare CF6-80 engines previously classified as assets held for sale (see Note 6 to our Financial Statements).
The special charge in 2022 represented a charge related to two CF6-80 engines leased without a contract to a customer.
Other decrease
Non-operating expenses (income)
The following table compares our non-operating expenses (revenues) for the three months ended
2022 2021 Inc/(Dec) % Change
Non-operating Expenses (Income)
Interest income $ (240 ) $ (211 ) $ 29 13.7 %
Interest expense 20,423 27,180 (6,757 ) (24.9 )%
Capitalized interest (3,764 ) (1,271 ) 2,493 NM
Unrealized loss on financial
instruments - 113 (113 ) NM
Other (income) expense, net (618 ) (39,456 ) (38,838 ) (98.4 )%
Interest expense decreased $6.8 million , or 24.9%, primarily due to the adoption
of the amended accounting guidance for convertible notes on January 1, 2022 (see
Note 2 to our Financial Statements) and the scheduled repayment of debt.
Capitalized interest increased $2.5 million primarily due to pre-delivery
deposits related to our January 2021 agreement to purchase four 747-8F aircraft
and our December 2021 agreement to purchase four 777-200LRF aircraft from Boeing
(see Note 2 to our Financial Statements).
Other (income) expenses, net, decreased mainly due to
22 -------------------------------------------------------------------------------- Income taxes. The effective income tax rates were 22.8% and 23.7% for the three months endedMarch 31, 2022 and 2021, respectively. The rate for the three months endedMarch 31, 2022 and 2021 differed from theU.S. statutory rate primarily due to state income taxes and certain expenses that are not deductible for tax purposes. Segments The following table compares the Direct Contribution for our reportable segments for the three months endedMarch 31 (see Note 10 to our Financial Statements for the reconciliation to Operating income) (in thousands): 2022 2021 Inc/(Dec) % Change Direct Contribution Airline Operations$ 185,818 $ 169,150 $ 16,668 9.9 % Dry Leasing 16,909 10,564 6,345 60.1 % Total Direct Contribution$ 202,727 $ 179,714 $ 23,013 12.8 %
Unallocated expenses and (income), net
63.7 % Airline Operations Segment Airline Operations Direct Contribution increased$16.7 million , or 9.9%, primarily due to increased Yields, net of fuel, including the impact of new and extended long-term contracts. Partially offsetting these improvements were increased pilot costs related to our new CBA and higher premium pay for pilots operating in certain areas significantly impacted by the COVID-19 pandemic.
Bareboat charter segment
Dry Leasing Direct Contribution increased$6.3 million , or 60.1%, primarily due to$5.0 million of revenue from maintenance payments related to the scheduled return of an aircraft and lower interest expense related to the scheduled repayment of debt.
Unallocated expenses and (income), net
Unrestricted expenditure and (revenue), net increase
Reconciliation of GAAP and Non-GAAP Financial Measures
To supplement our Financial Statements presented in accordance with GAAP, we
present certain non-GAAP financial measures to assist in the evaluation of our
business performance. These non-GAAP financial measures include Adjusted Net
Income, Adjusted Diluted EPS and Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA"), which exclude certain noncash
income and expenses, and items impacting year-over-year comparisons of our
results. These non-GAAP financial measures may not be comparable to similarly
titled measures used by other companies and should not be considered in
isolation or as a substitute for Net Income and Diluted EPS from continuing
operations, net of taxes which are the most directly comparable measures of
performance prepared in accordance with GAAP.
We use these non-GAAP financial measures in assessing the performance of our
ongoing operations and in planning and forecasting future periods. These
adjusted measures provide a more comparable basis to analyze operating results
and earnings and are measures commonly used by shareholders to measure our
performance. In addition, management's incentive compensation is determined, in
part, by using Adjusted Net Income and Adjusted EBITDA. We believe that these
adjusted measures, when considered together with the corresponding GAAP
financial measures and the reconciliations to those measures, provide meaningful
supplemental information to assist investors and analysts in understanding our
business results and assessing our prospects for future performance.
23
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The following is a reconciliation of Net Income and Diluted EPS to the
corresponding non-GAAP financial measures (see Note 13 to our Financial
Statements for the calculation of Diluted EPS) (in thousands, except per share
data):
For the Three Months Ended
March 31, 2022 March 31, 2021 Percent Change
Net Income $ 81,511 $ 89,933 (9.4 )%
Impact from:
CARES Act grant income (a) - (40,944 )
Customer incentive asset
amortization 10,051 10,481
Adjustments to CBA paid time-off
benefits (b) 2,154
–
Special charge (c) 2,633
–
Noncash expenses and income, net (d) - 4,672 Unrealized loss on financial instruments - 113 Other, net (e) (6,240 ) 329 Income tax effect of reconciling items (1,329 ) 7,631 Adjusted Net Income $ 88,780 $ 72,215 22.9 % Weighted average diluted shares outstanding 34,690
29,478
Less: effect of convertible
notes hedges (f) (5,031 )
–
Adjusted weighted average diluted
shares outstanding 29,659 29,478
Adjusted Diluted EPS $ 2.99 $ 2.45 22.0 %
For the Three Months Ended
March 31, 2022 March 31, 2021 Percent Change
Net Income $ 81,511 $ 89,933 (9.4 )%
Interest expense, net 16,419
25,698
Depreciation and amortization 72,202 67,789 Income tax expense 24,084 27,916 EBITDA 194,216 211,336 CARES Act grant income (a) - (40,944 ) Customer incentive asset 10,051 10,481 amortization Adjustments to CBA paid time-off 2,154
–
benefits (b) Special charge (c) 2,633
–
Unrealized loss on financial - 113 instruments Other, net (e) (6,240 ) 329 Adjusted EBITDA$ 202,814 $ 181,315 11.9 % (a)
CARES Act grant revenue in 2021 related to revenue associated with the Payroll Support Program (see Note 2 to our Financial Statements).
(b)
CTC paid leave adjustments in 2022 relate to our new CTC (see note 11 to our financial statements).
(vs)
The special charge in 2022 represented a charge related to two CF6-80 engines leased without a contract to a customer.
(D)
Non-cash income and expenses, net in 2021, are mainly related to the amortization of the debt discount on convertible notes (see note 7 of our financial statements).
(e)
Other, net in 2022 primarily related to a gain on the sale of six spare CF6-80 engines previously held for sale (see Note 6 to our Financial Statements). Other, net in 2021 primarily related to costs associated with our acquisition of an airline and leadership transition costs.
(F)
Represents the economic benefit from our convertible notes hedges in offsetting dilution from our convertible notes as we concluded in no event would economic dilution result from conversion of each of the convertible notes when our stock price is below the exercise price of the respective convertible note warrants.
Cash and capital resources
The most significant liquidity events during the first quarter of 2022 were the following:
InFebruary 2022 , we paid$100.0 million and received an initial delivery of 1,061,257 shares pursuant to an ASR under our new stock repurchase program approved by our board of directors, which authorized the repurchase of up to$200.0 million of our common stock. We subsequently settled the ASR inApril 2022 and received an additional 172,887 shares of common stock. See Note 12 to our Financial Statements for a discussion of our ASR. Operating Activities. Net cash provided by operating activities was$207.8 million for the first quarter of 2022, which primarily reflected Net Income of$81.5 million ; noncash adjustments of$85.3 million for Depreciation and amortization and$23.7 million for Deferred taxes; a$12.5 million increase in Accounts payable, accrued liabilities and other liabilities and a$10.0 million decrease in Accounts receivable, partially offset by a$3.6 million increase in Prepaid expenses, current assets and other assets. Net cash provided 24 -------------------------------------------------------------------------------- by operating activities was$88.1 million for the first quarter of 2021, which primarily reflected Net Income of$89.9 million ; noncash adjustments of$86.2 million for Depreciation and amortization and$27.8 million for Deferred taxes, partially offset by a$89.4 million decrease in Accounts payable, accrued liabilities and other liabilities; a$22.7 million increase in Accounts receivable and a$7.5 million increase in Prepaid expenses, current assets and other assets. Investing Activities. Net cash used for investing activities was$171.6 million for the first quarter of 2022, consisting primarily of$154.4 million of purchase deposits and payments for flight equipment and modifications and$29.9 million of payments for core capital expenditures, excluding flight equipment, partially offset by$13.5 million of proceeds from the disposal of flight equipment. Purchase deposits and payments for flight equipment and modifications during the first quarter of 2022 were primarily related to pre-delivery payments and spare engines. All capital expenditures for 2022 were funded through working capital. Net cash used for investing activities was$153.2 million for the first quarter of 2021, consisting primarily of$126.8 million of purchase deposits and payments for flight equipment and modifications and$26.7 million of payments for core capital expenditures, excluding flight equipment. Purchase deposits and payments for flight equipment and modifications during the first quarter of 2021 were primarily related to pre-delivery payments, spare engines and GEnx engine performance upgrade kits. Financing Activities. Net cash used for financing activities was$216.4 million for the first quarter of 2022, which primarily reflected$108.5 million of payments on debt,$80.0 million related to the purchase of treasury stock,$20.0 million related to the prepayment of accelerated share repurchase and$12.1 million related to treasury shares withheld for payment of taxes, partially offset by$4.2 million of customer maintenance reserves and deposits received. Net cash used for financing activities was$77.2 million for the first quarter of 2021, which primarily reflected$78.0 million of payments on debt,$12.3 million in payments of maintenance reserves and$7.4 million related to treasury shares withheld for payment of taxes, partially offset by$16.2 million of proceeds from debt issuance and$5.2 million of customer maintenance reserves and deposits received. We consider Cash and cash equivalents, Net cash provided by operating activities and availability under our revolving credit facility to be sufficient to meet our debt and lease obligations, to fund capital expenditures for 2022 and to purchase shares of our stock under our stock repurchase program (see Note 12 to our Financial Statements). Core capital expenditures for the remainder of 2022 are expected to range from$105.0 to$115.0 million , which excludes flight equipment and capitalized interest. Committed capital expenditures for flight equipment for the remainder of 2022 are expected to be approximately$659.9 million . Committed capital expenditures include pre-delivery and delivery payments for the purchase of four new 747-8F and four new 777-200LRF aircraft from Boeing, and other agreements to acquire spare engines. We expect to finance the aircraft delivery payments through secured debt financing. The first of the 747-8F aircraft is expected to be delivered during the second quarter of 2022 and the remaining three throughout 2022. The first 777-200LRF aircraft is expected to be delivered late in the fourth quarter of 2022 and the remaining three throughout 2023. We may access external sources of capital from time to time depending on our cash requirements, assessments of current and anticipated market conditions, and the after-tax cost of capital. To that end, we filed a shelf registration statement with theSEC inApril 2020 that enables us to sell debt and/or equity securities on a registered basis over the subsequent three years, depending on market conditions, our capital needs and other factors. Our access to capital markets can be adversely impacted by prevailing economic conditions and by financial, business and other factors, some of which are beyond our control. Additionally, our borrowing costs are affected by market conditions and may be adversely impacted by a tightening in credit markets. We do not expect to pay any significantU.S. federal income tax for at least several years. Our business operations are subject to income tax in several foreign jurisdictions and in many states. We do not expect to pay any significant cash income taxes for at least several years in these foreign jurisdictions and states. We may repatriate the unremitted earnings of our foreign subsidiaries to the extent taxes are insignificant. TheU.S. and numerous other countries are currently considering tax reform, which could result in significant changes toU.S. and international tax laws. The potential enactment of these laws could have a material impact on our business, results of operations and financial condition. We continue to monitor developments and assess the impact to us.
Description of debt agreements
See our 2021 Annual Report on Form 10-K for a description of our debt securities and their changes as of
Off-balance sheet arrangements
There have been no material changes to our off-balance sheet arrangements during the three months ended
25 --------------------------------------------------------------------------------
Recent accounting pronouncements
See note 2 to our financial statements for a discussion of recent accounting pronouncements.
Forward-looking statements
This Quarterly Report on Form 10-Q (this "Report"), as well as other reports, releases and written and oral communications issued or made from time to time by or on behalf of AAWW, contain statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements are based on management's beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words "will," "may," "should," "expect," "anticipate," "intend," "plan," "continue," "believe," "seek," "project," "estimate" and similar expressions used in this Report that do not relate to historical facts are intended to identify forward-looking statements. The forward-looking statements in this Report are not representations or guarantees of future performance and involve certain risks, uncertainties and assumptions. Such risks, uncertainties and assumptions include, but are not limited to, those described in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . Many of such factors are beyond AAWW's control and are difficult to predict. As a result, AAWW's future actions, financial position, results of operations and the market price for shares of AAWW's common stock could differ materially from those expressed in any forward-looking statements. Readers are therefore cautioned not to place undue reliance on forward-looking statements. Such forward-looking statements speak only as of the date of this report. AAWW does not intend to publicly update any forward-looking statements that may be made from time to time by, or on behalf of, AAWW, whether as a result of new information, future events or otherwise, except as required by law and expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.
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